Ive finally rejigged my portfolio to indexing

Interesting thread.

Makes a lot of sense to me Dkmc, I can see myself doing something similar to yourself when I'm able to.

Yeah me too, I'm looking forward to my portfolio over again. Won't do it though for a couple of years.. sigh.

Which means what exactly? You're "out" of the market for now??

Might have missed that post if that is in fact the case.

Cheers,
Michael

PS Thanks dkmc, some great food for thought. I might even PM you for some details so I can see how readily I can apply it to my portfolio. I like Travis Morien too and the simple concept of diversification reducing your Beta. I must admit to considering going about it via STW or equivelant. My entire share portfolio is ASX at the moment, so I should probably look for some international exposure too.

I think I missed typing a word or two.. must have been half asleep. What I meant to say was that I'm looking forward to starting my portfolio over again. Currently I've got Navra wholesale, Platinum Intl, some property trusts, some Aussie ASX200 retail trusts, that kinda thing. It's done ok up until now, but if I had my time over again I wouldn't pick them again.

I plan on selling it all in a couple of years time, when my portfolio = mortgage (currently mortgage is quite a bit bigger than portfolio), paying off the mortgage, then redrawing and starting again with either index funds or instalment warrants. Until then I'm in a bit of a boring old holding pattern..

Cheers michael
Ive been strong on LIC/ ETFs - and now that ishares is available
thats a more viable method
Have a look at the MER of the US fund - thats incredibly low
I just find it a hassle to rebalance the portfolio - You will also be tempted to time LICs or ETFs - eg last friday - dip in US market, black monday on monday - I put in a sell order for monday for STW hoping to pick up STW at a lower price - again emotional logic, stw dropped low too quickly for me to make the sale and I cancelled the order anyway after more thought
I suspect michael that you will be tempted by this too


Still - I always want to outperform the market index and adding - DFA at the expense of using a planner and wrap platform - say about 0.6% above that of using ETFs, I think is worth it
It also provides access to some emerging market funds
A good planner will provide good support
consolidated reporting, rebalancing,
and generally automation and peace of mind

dkmc,

I notice that the minimum is $1m for each fund. Is that why you must use a wrap platform ?

Could you explain the term "alpha" please.

I find the fact that you must use a finacial planner a bit offputting however I could probably benefit from this due to my limited time and knowledge.

I am looking for a suite of mgd funds for about half of my smsf approx $80k.

Dr Lobster
Yes DFA insist that one uses an advisor who is trained / up to date in the theory behind DFA and the academic material to support it. It is one way for the fund not to have investors buying and selling all the time, reducing the overall efficiency of the fund.
Look for a fee for service financial planner with no vested interests to taking commissions. There are only a handful in australia
Interview a few of them and see who you like. Thats how I did it.
A planner would have a good idea on the tax side of super and keep up to date - which is something that keeps on changing

Because minimum is 1million - you need wrap to get in
But a lot of advisors can get huge discounts on wraps if they are with a large firm, and get discounts on margin loans.

Explaining alpha
now thats a hard question given that I have not studied the mathematics behind this concept properly
From around the web the best one liners I can find are

"Alpha" is the amount of money you make at the expense of other investors. "Beta" is the amount of money everyone makes due to the return of the market itself.
from Travis Morien - die hards forum

http://www.ilukacg.com/articles/Tao%20of%20Alpha.pdf
If the total market return per unit of risk were a pie, beta would be an investor’s fair share and
alpha would be extra pieces—or bites or crumbs—taken from others.

Hi DKMC,

Personally I'm a bit sceptical about pure FFS.
They'll take your money and then bugger off...

Go figure...

Cheers,

Dan

Dkmc,

I appreciate your answers mate, thanks.

Would you be willing to tell me which FP yar using to access DFA. The one I was going to use wanted to charge $4k for a $75k allocation (a polite way of saying it aint worth it to us).

Thanks

If you'd like to send me a PM I can give you the details of a good DFA advisor who has very reasonable FFS charges.

Regards,

PW